Chaz Corporation has taxable income in 2018 of $452,000 for purposes of computin

Question

Chaz Corporation has taxable income in 2018 of $452,000 for purposes of computing the §179 expense and acquired the following assets during the year: Assume that the qualified improvement property has satisfied the conditions mentioned under Section 179(f)(2). Placed in Asset Service Basis Office furniture September 12 $ 781,000 Computer equipment February 10 906,000 Delivery truck August 21 53,000 Qualified improvement property September 30 1,507,000 Total $ 3,247,000 What is the maximum total depreciation deduction that Chaz may deduct in 2018? (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.)
Chaz Corporation has taxable income in 2018 of $452,000 for purposes of computing the §179 expense and acquired the following assets during the year: Assume that the qualified improvement property has satisfied the conditions mentioned under Section 179(f)(2). Placed in Asset Service Basis Office furniture September 12 $ 781,000 Computer equipment February 10 906,000 Delivery truck August 21 53,000 Qualified improvement property September 30 1,507,000 Total $ 3,247,000 What is the maximum total depreciation deduction that Chaz may deduct in 2018? (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.)
Chaz Corporation has taxable income in 2018 of $452,000 for purposes of computing the §179 expense and acquired the following assets during the year: Assume that the qualified improvement property has satisfied the conditions mentioned under Section 179(f)(2). Placed in Asset Service Basis Office furniture September 12 $ 781,000 Computer equipment February 10 906,000 Delivery truck August 21 53,000 Qualified improvement property September 30 1,507,000 Total $ 3,247,000 What is the maximum total depreciation deduction that Chaz may deduct in 2018? (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.)

Explanation / Answer

Asset Original Basis §179 Depreciation expense Remaining Basis Bonus Depreciation 50% Remaining Basis MACR Rate Depreciation expenses Office furniture (7 years) $781,000.00 $253,000.00 $528,000.00 $264,000.00 $264,000.00 14.29% $37,725.60 Computer equipment (5 years) $906,000.00 $906,000.00 $453,000.00 $453,000.00 20.00% $90,600.00 Delivery truck (5 years) $53,000.00 $53,000.00 $26,500.00 $26,500.00 20.00% $5,300.00 Qualified improvement property (100% bonus depreciation) $1,507,000.00 $1,507,000.00 $1,507,000.00 $0.00 Total $1,740,000.00 $253,000.00 $743,500.00 §179 Depreciation expense $253,000.00 Total Bonus Depreciation $743,500.00 Total Depreciation Expenses $1,130,125.60 Chaz will receive the most benefit by applying the §179 amount to the furniture 7­year property. §179 Depreciation expense Property placed in service (a) $3,247,000.00 Threshold for §179 phase­out (b) $2,500,000.00 Phase­out of maximum §179 expense (c) $747,000.00 Maximum 179 expense before phase­out (d) $1,000,000.00 Phase­out of maximum §179 expense (c) $747,000.00 Maximum §179 expense after phase­out (d-c) $253,000.00

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